Agencies Preview Form 5500 for Reporting in 2020

Major revisions were not finalized for reporting on 2019 benefit plans

Stephen Miller, CEBS By Stephen Miller, CEBS December 5, 2019

Advance copies of Form 5500 information returns, used to report on plan year 2019 benefits, reflect an increase in maximum civil penalties under the Employee Retirement Income Security Act (ERISA), among other changes.

The U.S. Department of Labor's Employee Benefits Security Administration (EBSA), the IRS and the Pension Benefit Guaranty Corp. (PBGC) released advance copies of the 2019 Form 5500 and related instructions in November. For smaller filers, advance copies of 2019 Form 5500-SF (short form) and 2019 Instructions for Form 5500-SF also were made available, along with supplemental materials that include schedules and attachments.

Form 5500 and required schedules and attachments are used to report the financial conditions, investments and operations of employee benefit plans, including:

  • Retirement and savings plans, such as defined benefit pension plans, 401(k)s and similar defined contribution, profit sharing and stock bonus plans.
  • Health and welfare plans, such as medical, dental, life insurance and disability benefit plans.

Major Form 5500 revisions that federal agencies had originally proposed for reporting on plan year 2019 were never finalized, but the proposed overhaul could be revived and completed for future reporting, benefits advisors said.

Filing Requirements

Advance copies of the 2019 Form 5500 are for informational purposes only. Official electronic versions will be available on the federal government's EFAST2 website in early 2020. Filers should monitor the website in January for the release of the official electronic forms, the agencies advised.

Administrators or sponsors of employee benefit plans subject to ERISA must file information about each benefit plan every year. A small plan (generally one with fewer than 100 participants at the beginning of the plan year) may be eligible to file Form 5500-SF instead of Form 5500. Moreover, some plans with fewer than 100 participants are exempt from filing an annual return or report under certain conditions, as detailed in the Plans Exempt from Filing section of the forms' instructions.

Form 5500 annual return or report filing is due on the last day of the seventh month after the plan year ends, with an optional two-and-a-half-month extension. For plans that follow a calendar year, Form 5500 for the prior year is due July 31 and on Oct. 15 with an extension.

[SHRM members-only HR Q&A: What is the ERISA Form 5500?]

Reporting Changes

The Changes to Note section of the 2019 instructions review the revisions to Form 5500 and Form 5500-SF, as well as updates to their schedules and instructions. Margaret Berger and Ellen Stone, principals in Mercer's law and policy group, highlighted two changes of interest to retirement plan administrators:

  • Higher late-filing penalties. Federal agencies annually index civil penalties for inflation. The updated instructions reflect the increased maximum penalty of $2,194 per day for late filings, up from $2,140 for plan year 2018 reporting. "In practice, however, DOL rarely seeks the highest penalty" for compliance violations, Berger and Stone noted.
  • Information on missed contributions. Following a 2018 PBGC proposal, Schedule R includes a new question for sponsors of PBGC-insured single-employer pension plans reporting unpaid minimum required contributions on Schedule SB. "Sponsors will now have to indicate on Schedule R whether they notified PBGC about the missed contribution, as required unless an event-reporting waiver applies," Berger and Stone explained. "Sponsors that did not notify PBGC will have to explain the reason for a reporting waiver or for their failure to report as required."

The new question relates only to contributions unpaid at the end of the grace period (generally 1/2 months after plan year-end), not to quarterly contributions paid late but before that deadline, Berger and Stone pointed out.

Other Form 5500 changes for reporting in 2020 include the following:

  • Multiemployer plans. The instructions clarify how to report the plan sponsor's business code for multiemployer plans on Line 2d of Form 5500.
  • Schedule SB mortality tables. Line 23 has been revised to eliminate mortality table options that are not available after 2018.

Big Changes on Hold

In 2016, the DOL, the IRS and PBGC proposed significant revisions to Form 5500. As SHRM Online reported, the revisions would greatly expand the type and amount of information to be collected, which would include the following:

  • Expanded information about group health plans.
  • Improved service provider fee information.
  • More-detailed financial reporting.

The greatest impact would fall on small health and welfare plans. Many of these plans are currently exempt from Form 5500 reporting requirements, but that exemption would no longer apply.

However, efforts to finalize the revisions, which were originally proposed to take effect for plan year 2019 reporting, have been put on hold, said Lisa Allen, vice president of regulatory affairs at Relph Benefit Advisors in Fairport, N.Y. She also recently served on the IRS Advisory Council.

The DOL and IRS "are so far behind due to implementing the Tax Cuts and Jobs Act that I don't see them picking this back up" anytime soon, Allen said.



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